WB urges bold fiscal reforms for debt crisis

WB emphasizes strong macroeconomic frameworks to ensure fiscal sustainability

ISLAMABAD:

World Bank’s (WB) Global Director for Governance, Arturo Herrera Gutierrez, on Thursday stressed the need for ‘bold’ fiscal reforms to address Pakistan’s debt distress and achieve macroeconomic stability.

Speaking at a lecture organised by the Pakistan Institute of Development Economics (PIDE), Gutierrez highlighted the urgency of sustainable fiscal reforms, drawing from international experiences.

“Pakistan stands at a crucial juncture where it can either pave the path for sustained economic growth or fall into the recurring traps of debt distress,” he remarked. Gutierrez discussed historical economic challenges faced by countries like Mexico in the 1980s and how these experiences shape fiscal strategies today.

Additionally, he emphasised that ensuring fiscal sustainability required a comprehensive long-term strategy, not just balancing budgets annually.

“These measures are critical for building credibility and securing access to financial markets,” the WB director said while underscoring the need to maintain consistency over time to avoid the economic problems of the past.

Published in The Express Tribune, April 26^th, 2024.

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